Kilroy Realty : First Quarter 2026

Published: 2026-04-27 16:20:13 ET KRC

Published on 04/27/2026 at 04:20 pm EDT

Supplemental Financial Report Q1 2026

Kilroy Oyster Point, South San Francisco, CA

KILROY REALTY CORPORATION REPORTS FIRST QUARTER FINANCIAL RESULTS

LOS ANGELES, April 27, 2026 - Kilroy Realty Corporation (NYSE: KRC) ("Kilroy" or the "Company") today reported financial results for the first quarter ended March 31, 2026.

"I am pleased to report on a remarkably strong quarter of execution across all facets of our business. First-quarter leasing activity, which totaled 568,000 square feet, represented the Company's strongest first-quarter performance since 2017, as we continued to capitalize on accelerating momentum across the West Coast," said Angela Aman, Chief Executive Officer. "In addition, we remained active on the capital allocation front, selling approximately $350 million of non-core and non-strategic properties year-to-date, while prudently allocating capital to debt repayments, opportunistic share repurchases, and a substantially pre-leased development project in one of the Company's best-performing submarkets."

Revenues of $270.1 million for the quarter ended March 31, 2026, as compared to $270.8 million for the quarter ended March 31, 2025

Net loss available to common stockholders of $(19.3) million, or $(0.16) per diluted share, for the quarter ended March 31, 2026, as compared to Net income available to common stockholders of $39.0 million, or $0.33 per diluted share, for the quarter ended March 31, 2025

Funds from operations ("FFO") of $108.8 million, or $0.91 per diluted share, for the quarter ended March 31, 2026, as compared to $122.3 million, or

$1.02 per diluted share, for the quarter ended March 31, 2025

Stabilized Portfolio was 77.6% occupied and 82.3% leased at March 31, 2026, representing 470 basis points of leases signed but not yet commenced

Excluding Kilroy Oyster Point Phase 2 ("KOP 2"), the Stabilized Portfolio was 81.5% occupied and 84.3% leased at March 31, 2026, representing 280 basis points of leases signed but not yet commenced

During the quarter, signed approximately 568,000 square feet of leases

Leasing activity was comprised of 406,000 square feet of new leasing on previously vacant space, 80,000 square feet of new leasing on currently occupied space, and 82,000 square feet of renewal leasing

New leasing on vacant space included an approximately 145,000-square-foot development lease with Cooley LLP, a global law firm. See "Joint Venture Formation" section below for additional details

Leasing activity during the quarter included approximately 70,000 square feet of short-term leasing

GAAP and cash rents on leases signed during the quarter decreased (10.6)% and (16.8)%, respectively, from prior levels on Second Generation leasing, excluding short-term leasing

Excluding leases signed on space vacant for more than 12 months, GAAP and cash rents on leases signed during the quarter increased 19.2% and 5.2%, respectively

In January, completed the sale of Kilroy Sabre Springs, an approximately 428,000-square-foot, three-building campus in the I-15 Corridor submarket of San Diego, for gross sales proceeds of $124.5 million

In March, completed the sale of Del Mar Tech Center, an approximately 39,000-square-foot office property in the Del Mar submarket of San Diego, for gross sales proceeds of $21.0 million

During the first quarter, entered into an agreement to sell the 200-unit Columbia Square Living residential tower and the 193-unit Jardine residential tower in the Hollywood submarket of Los Angeles and classified the properties as Held for Sale. The sale closed in April for gross sales proceeds of

$202.0 million

During the quarter, repurchased approximately 2.4 million shares of common stock at a weighted average price of $30.80 per common share for an aggregate purchase price of $72.7 million

In February, acquired an interest in 1900 Broadway, a fully-entitled land site in Downtown Redwood City capable of supporting a 251,000-square-foot office building. Concurrent with closing, signed a 20-year lease with Cooley LLP for 145,000 square feet, bringing the project to 58% pre-leased. Total project costs are expected to range from $330.0 million to $350.0 million. Construction is anticipated to commence in 2027, with delivery scheduled for 2030, at which time the Company's ownership interest is expected to be 97%

The Board declared and paid a regular quarterly cash dividend on its common stock of $0.54 per share, equivalent to an annual rate of $2.16 per share. The dividend was paid on April 8, 2026 to stockholders of record on March 31, 2026 (the ex-dividend date)

In April, repaid the outstanding $50.0 million of 4.300% Private Placement Senior Notes Series A due July 2026, at par

Net Income Available to Common Stockholders / FFO Guidance

The Company is updating Nareit-defined FFO per share guidance for the full year 2026 to $3.49 to $3.63 per diluted share, from the previous range of $3.25 to $3.45. The table below reflects key assumptions for 2026 guidance.

Key Assumptions

February 2026 Assumptions

April 2026 Assumptions

Average full year occupancy

76.0% to 78.0%

76.5% to 78.0%

Average full year occupancy excluding KOP 2

80.0% to 81.5%

80.5% to 81.5%

Same Property Cash Net Operating Income ("NOI") growth (1) (2)

(1.50%) to 0.00%

0.25% to 1.25%

NOI from Development Properties (3)

$(23.5) to $(25.0) million

$(22.5) to $(24.0) million

Non-Cash GAAP NOI adjustments (1) (4)

$12.0 to $14.0 million

$13.0 to $15.0 million

GAAP lease termination fee income

$3.0 to $4.5 million

No change

General and administrative and Leasing costs

$(89.0) to $(91.0) million

$(87.5) to $(89.5) million

Interest income

$2.0 to $3.0 million

No change

Gross interest expense

$(212.0) to $(214.0) million

$(208.0) to $(209.5) million

Capitalized interest (5)

$32.0 to $34.0 million

$48.5 to $49.5 million

Total development spending (6)

$150.0 to $200.0 million

No change

Operating property dispositions

+/- $300.0 million

$347.5 to $500.0 million

Net income available to common stockholders per share - diluted

$ 0.59

$ 0.79

$ 0.08

$ 0.22

Weighted average common shares outstanding - diluted (7)

120,100

118,100

Net income available to common stockholders

$ 70,800

$ 95,040

$ 9,055

$ 25,743

Adjustments:

Net income attributable to noncontrolling common units of the Operating Partnership

300

Net income attributable to noncontrolling interests in consolidated property partnerships

17,000

Depreciation and amortization of real estate assets

342,000

379,400

Gain on sale of depreciable operating property

(8,200)

(23,525)

Impairment of real estate assets

61,778

Funds From Operations attributable to noncontrolling interests in consolidated property

partnerships

(28,000)

Funds From Operations (1)

$ 393,900

$ 418,140

$ 416,008

$ 432,696

Weighted average common shares/units outstanding - diluted (8)

121,200

119,200

Nareit Funds From Operations per common share/unit - diluted (1)

$ 3.25

$ 3.45

$ 3.49

$ 3.63

For additional information, please refer to pages 36-38 "Non-GAAP Supplemental Measures" for management statements on the Company's non-GAAP measures.

Increase in guidance range includes $5.9 million in settlement income received in Q2 2026.

NOI from Development Properties is primarily comprised of carry costs associated with Company's KOP 2 and Flower Mart projects. Guidance now assumes the continued capitalization of the Company's Flower Mart project through December 2026, previously assumed to be June 2026.

Non-Cash GAAP NOI adjustments include the following items: Amortization of deferred revenue related to tenant-funded tenant improvements, Straight-line rents, net, Amortization of net below market rents, and Lease related adjustments and other.

Capitalized interest guidance now assumes the continued capitalization of the Company's Flower Mart project through December 2026, previously assumed to be June 2026.

Total development spending includes recently stabilized, in-process, and future development projects.

Calculated based on estimated weighted average shares outstanding, including non-participating share-based awards and the dilutive impact of contingently issuable shares.

Calculated based on the weighted average shares outstanding, including participating and non-participating share-based awards, and the dilutive impact of contingently issuable shares, and assuming the exchange of all common limited partnership units outstanding. Reported amounts are attributable to common stockholders, common unitholders, and restricted stock unitholders.

The Company's guidance estimates for the full year 2026, and the reconciliation of Net income available to common stockholders per share - diluted and FFO per share and unit - diluted included within this press release, reflect management's views on current and future market conditions, including assumptions with respect to rental rates, occupancy levels, and the earnings impact of the events referenced in this press release. These guidance estimates do not include the impact on the Company's operating results from any events outside of the Company's control, as the timing and magnitude of any such events are not known at the time the Company provides guidance. There can be no assurance that the Company's actual results will not differ materially from these estimates.

Conference Call and Audio Webcast

The Company's management will discuss first quarter results and the current business environment during the Company's April 28, 2026 earnings conference call. The call will begin at 10:00 a.m. Pacific Time and last approximately one hour. To participate and obtain conference call dial-in details, register by using the following link, https://events.q4inc.com/analyst/264481752?pwd=Vl5fneFS. Those interested in listening via the Internet can access the conference call at https://events.q4inc.com/attendee/264481752. It may be necessary to download audio software to hear the conference call.

Disclaimer

Kilroy Realty Corporation published this content on April 27, 2026, and is solely responsible for the information contained herein. Distributed via Public Technologies (PUBT), unedited and unaltered, on April 27, 2026 at 20:18 UTC.